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Suppose the Income Elasticity of Demand for Toys Is −0

Question 254

Multiple Choice

Suppose the income elasticity of demand for toys is −0.5. This means that


A) a 12 percent increase in income will decrease the purchase of toys by 6 percent.
B) a 12 percent increase in income will decrease the purchase of toys by 24 percent.
C) a 12 percent increase in income will increase the purchase of toys by 6 percent.
D) toys are a normal good.

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